When will we address the elephant in the room and actually do something about it?
The housing market is slowly entering a territory Nobody has seen it before. While a whole generation apparently has to sit still and watch, as it happens.
We professionals have also looked at it. First row, VIP ticket, since the American dream has been getting further and further out of reach of the middle class since 2020.
It’s no secret that House prices have increased by 46% national since 2020While the financing costs also shot up, with the mortgage interest in 2023-2024 broke through the 7% limit. With the average home buyer inside 2019 pay $ 9,061 in mortgage interest per yearThis is expected to be the mature figure $ 24,345 a year From July 2025.
While the costs of everything have risen, and not a bit.
Financing a used car – ($ 539/month) increase of 35.8%
Insure your car – ($ 233/month) increase of 155.4%
Provide your house with electricity – ($ 178/month) increase of 52.1%
Take care of one young child – (($ 1,365/month) increase of 53.3%
Filling a shopping cart, buying new tires or taking care of your pet? Yes. Since 2020 it has all become more expensive. For everyone.
So let me ask me: who hurts the most? Who feels most feels the victims of this economy?
Short answer: Those who had no form of inflatory assets before 2020.
Long answer: The generation that learned what it was like to be young adults when Covid struck, can be a group to focus on.
A generation that their parents saw navigating at a young age on the dark markets from 2007 to 2009. A generation that became teenagers when politics just started to be upside down. We leave positivity and vision behind to hate our neighbors instead. A generation that is just aware of what life really is like, just when they are told that they should stay in their house for two weeks after a multi -year national lockdown. While the costs of everything you and I would have done as 20 to 25-year-olds are astronomically more expensive. While wages did not pace the same.
The average household income for a potential starter in our country is $ 68,000. According to Nar, the starter home is valued today $ 368,000 This means that the average buyer deserves a starter home $ 108,520 To be eligible and to survive the mortgage payments.
$ 108k! This number was Less than 10 years ago below $ 50,000.
What happened? Have wages risen to keep pace with inflation? No.
Wages have risen by 21% since 2015, compared to a cumulative inflation figure of 36.7% (according to the BLS) and 57% higher housing values. And do you know where wages have risen the least?
Understandable, on the labor market at entry level. 10.2% Of the 24-27 year olds with a diploma unemployed. Do you know the percentage of young people who have a job and is still considered ‘too little work’? (This means that they earn considerably less than their diplomas yield) 49.4%.
In 20251 in 8 young Americans (12.2%) is married and has a house. In 1999 that number was still so More than 50%
What happens if the next generation mathematically has no more options? When the costs for pursuing the American dream above the level of continuing to rise “Hard work” And “Pick up themselves at the bootriks” That they can offer, what can they do?
Everyone has to start somewhere. And nobody gets away easily. The next generation does not earn alms. But they do deserve to see the film the same light at the end of the tunnel That we saw. The same chance we got.
Nowadays these opportunities are for the investor, the company and (not offensive) De Boomer.
In 2025, 27% of the houses were sold to private individuals with profit plans of them (via rental, Airbnb, etc.), The highest number ever measuredCompared to the 23% of the purchases made for the first time.
Institutional investors see the neighbors struggling, buying the neighborhood to take advantage of the cash flow. Boomers use the equity they have built up and to exceed the pension accounts that have grown over the past decades to exceed any feasible offer that a starter can put on the market. Yet There will be no news about a new housing initiative.
No executive order, hearing in the congress, or bill that could not only unlock the housing market in general, but also the market for the wrestling, tired and tired young family that simply wants the same American dream they hear about growing up.
So no, that’s it not The avocadoostoost. It is not just about lowering the mortgage interest. It is a system that cares more about its shareholders than those who have a share in this country.
It is about the money flow for another multi -millionaire who does not care about the systemic commodification of shelter. And it’s about history, because if history in our country can tell us something, then it is the rich and powerful Will ensure that they stay exactly – Rich and powerful. We have to transfer that wealth to the next generation in one way or another.
How could we do it? Can we burden the rich?
What if we created an investor ladder? A kind of tax disk system. If you buy real estate with profit plans (say that 5 times quickly). You must pay a fee. (Comparable to how a VA buyer must pay a fee) that can be reimbursed if a ladder goes up, determined by the number of units that are registered under him or their affiliated LLCs (I know, it can become slimy in the LLC world if you try to keep track of ownership). But think about it.
1-10 homes owned? 2% of the purchase price, paid once when closing, per unit.
100+ homes owned? 7% cost when closing and for every new unit purchased.
Yes. That’s steep. That’s the point.
If you are going to get a neighborhood of the card for starters again, you can at least help finance the next generation’s chance to buy only one.
No monthly costs, no tax increase, we do not mess with the almighty cash flow. It is a pure fee that could flow directly to a State Fund for Starters on the housing market for coverage of deposit assistance and buying rates for non-homeowners. If an area has a higher than average investment percentage, it will have to fight a higher FTHB fund. See it as one “Take-A-Home & Make-A-Home” program.
Regardless of this idea, or many others that I want to publish in the future in collaboration with Housingwire, we have to communicate. We need new ideas for innovation in the field of housing, good taxes, zoning plans for real estate, the costs of living, etc.
We must give starters in the housing market a chance.
The Land of Opportunities sees fewer opportunities for the next generation, and I wonder. When will we do something to help the next generation of red -blooded Americans? Generation Z?“”
Zachary Foust is a real estate agent and team leader based in the south of Delaware with almost ten years of experience in residential real estate.
This column does not necessarily reflect the opinion of the editors of Housingwire and its owners. To contact the editor who is responsible for this piece: [email protected].
Related
#elephant #room